Fishing vessels - economic link: island communities impact assessment (ICIA)

Step One – Develop A Clear Understanding Of Your Objectives

What are the objectives of the policy, strategy or service?

The Scottish Government committed to strengthening the economic link licence condition for Scottish registered fishing vessels to deliver greater benefits to Scotland, and its fisheries-dependent areas, from Scottish fishing opportunities. Licence conditions are to be amended so that landings into Scotland form the main basis for compliance with the condition.

Current licence conditions apply to vessels over 10 metres in length landing more than two tonnes of quota stocks and provides licensees with a number of ways in which an economic link to the United Kingdom may be established, including by:

• By landing 50% of quota stocks caught in any calendar year into UK ports (“the landings target”);
• By employing crew 50% of whom normally reside in the UK;
• By incurring 50% of operating expenditure in the UK; or
• If a licence holder fails to meets any of these options, or a combination thereof, they are required to provide quota to their relevant authority – so called “Gifted Quota”.

On 30 August 2017, the Scottish Government issued a public consultation seeking views on the following proposals:

• Making landings into Scotland the main basis for complying with the economic link licence condition and that options for demonstrating an economic link to Scotland through crewing and/or operating expenditure should be removed (on the basis that they provide less economic benefit than direct landings into Scotland).
• That the landings target should increase from 50% to 55%.
• That there should be transitional arrangements in relation to landings of pelagic fish.
• For those vessels not meeting the landings target, the option of gifting quota to the Scottish Government should continue but with a revised formula for calculating the quota owing to the Scottish Government in lieu of missed landings.

Following the consultation and having considered responses to it, subsequent feedback from interested parties and other available evidence, the Scottish Government will introduce amended economic link licence condition in line with the proposals set out above. In addition, the following arrangements will be introduced:

• The landings target will apply only to the eight quota species (mackerel, herring, Nephrops, cod, haddock, hake, monkfish and whiting) with the greatest landed value in Scotland (the “8 key species”).
• The landings tonnage at which a vessel becomes eligible for economic link provisions will increase from two tonnes to ten tonnes.

Fishing opportunities arising from gifted quota will be allocated differently.

What are the intended impacts or outcomes?

The intention is that these amended licence conditions will result in additional landings of high value species into Scotland thereby increasing the socio-economic benefits to coastal communities from Scotland’s fishing opportunities.

Landings into Scotland, as opposed to crewing and vessels’ operating expenditure, are considered to offer a stronger economic link as, in general, they result in increased economic activity. Increased landings of the most valuable species will create opportunities in processing and other onshore industries.

This is particularly important for the pelagic fleet[1] where there are relatively low levels of labour intensity required to operate these vessels which limits the scope to spread economic benefits from pelagic fishing opportunities through crewing.

Vessels not meeting the landings target will instead gift quota to the Scottish Government. It is anticipated that the allocation of this gifted quota will bring socio-economic benefits to Scottish coastal communities.

How do these impacts potentially differ?

Modelling in Annex A demonstrates that the amendments will have the greatest impact on Scotland’s pelagic fleet which currently land significant volumes of mackerel and herring abroad.

Scotland’s pelagic fleet is concentrated in the landing districts of Fraserburgh, Peterhead and Shetland.

Impact on pelagic vessels

Pelagic vessels landing the majority of their catch abroad (whether registered in Fraserburgh, Peterhead or Shetland) have previously complied with economic link provisions through the residency of their crew. As this option will no longer be available, these vessels will be required to land the mandatory percentages of their catch into Scottish ports or provide the Scottish Government with quota for onward distribution. Though we consider that these vessels will be impacted, we do not consider that the new arrangements will be overly burdensome (please see accompanying BRIA for additional details).

Impact on pelagic processors

The main pelagic processing plants are located near the Scottish ports where the Scottish pelagic fleet are based and land (Peterhead, Fraserburgh and Shetland). These businesses will benefit from the change if more fish is landed and ultimately processed in Scotland (please see accompanying BRIA for additional details).

Summary

Modelling in Annex A shows the three landing districts of Scotland will be most impacted as they administer large pelagic vessels which land significant volumes of mackerel and herring abroad. One of these three areas is the Shetland Isles where, over the period 2015-2019, 8 individual businesses (each owning one vessel) landed in total 297,820 tonnes abroad. Though these Shetland based vessels will be impacted, vessels will similarly be impacted in Peterhead and Fraserburgh.

It is anticipated that the policy change will result in additional landings into Scotland which will benefit pelagic processors.